Saturday, August 16, 2008

How to ruin an industry

Just the other day I was in one of my customers cars, and I noticed multiple copied CD’s on the sun visor. This got me to thinking of my youth, when if you wanted to make a copy of a song from your friend it was really a pain, and often not cheap. With CD burners in almost every new computer that comes out on the market, and the price of writeable CD's for pennies they have made it so easy for anyone to make multiple copies of a CD in minutes.

The same holds true for the Auto Glass business, I remember when PPG, Pilk, etc would not sell to you until you established a account with them , and then they determined your buying rate based on your credit and your volume. These days anyone with a Yugo with a glass rack strapped to the roof , buying one part a week can almost buy as competitively as I do. And I buy a fair amount of parts, most likely more in one week than the people buying at the same rate do in a month.

The wholesale glass industry has created this problem for themselves by allowing purchasing power to not dictate price. Sales people are so desperate to make sales that they do not care if your able to pay your bill, that is provided it does not cut into their commission.

A serious correction to the US Glass price erosion starts at the distribution level. Just like a writeable CD for a penny is where the problem starts with the recording industry. We have allowed people with little to no knowledge to buy a product that should be price controlled on a distributor level like it was years ago. If CD's were $10 like they use to be, not many people would be burning CD's. Same as if the distributors had not let dog and pony show, buy at the level of major players. Price should as it use to be determined by volume.

Larry Diesbach Jr

1 comment:

Anonymous said...

rant rant rant